Application of Aesthete Pty Ltd

[2019] NSWSC 965

Supreme Court

New South Wales

Medium Neutral Citation:	Application of Aesthete Pty Ltd [2019] NSWSC 965
Hearing dates:	10 April 2019
Date of orders:	31 July 2019
Decision date:	31 July 2019
Jurisdiction:	Equity
Before:	Henry J
Decision:	See paragraph [64]
Catchwords:	EQUITY – trusts and trustees – judicial advice –whether jurisdiction under s 63 Trustee Act 1925 (NSW) engaged – whether Court should exercise discretion to provide advice – where allegations of breach of duty against trustees and director of trustees – advice granted on limited terms – further reasons in confidential judgment
Legislation Cited:	Trustee Act 1925 (NSW), ss 63, 85 Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, s 18
Cases Cited:	Application of Gnitekram Marketing Pty Limited [2010] NSWSC 1328 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 Henry John Northey v Jennifer Frances Juul & Anor [2014] NSWSC 464 Jones v Hirst [2013] NSWSC 163 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 Perpetual Investment Management Ltd as Responsible Entity for 10 Schemes listed in the Summons [2014] NSWSC 784 Re Australian Pipeline Limited 60 ACSR 625; [2006] [2006] NSWSC 1316 Re Rosewood Research Pty Limited [2014] NSWSC 449 The Application of Eurolinx Pty Limited in its capacity as trustee for the Colbert Security Trust [2017] NSWSC 1306
Category:	Principal judgment
Parties:	Aesthete Pty Limited as trustee for The Real Money Unit Trust (first plaintiff) Aesthete No. 3 Pty Ltd as trustee for The Hospital Precinct Unit Trust (second plaintiff) Gilmore Finance Pty Ltd (objector)
Representation:	Counsel: A Fernon (first & second plaintiff) R Marshall SC (objector)   Solicitors: Yeldham Price O’Brien Lusk (first & second plaintiff) McKays Solicitors (objector)
File Number(s):	2018/00186268
Publication restriction:	No

Judgment

1. These proceedings concern an application for judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) by Aesthete Pty Ltd (A1), the trustee of the Real Money Unit Trust (RMUT), and Aesthete No. 3 Pty Ltd (A3), the trustee of the Hospital Precinct Unit Trust (HPUT). In these reasons, I refer to A1 and A3 together as the Trustees and the RMUT and the HPUT together as the Trusts.

2. By summons filed 15 June 2018, the Trustees seek advice in relation to Commercial List proceedings (Gilmore proceedings) brought against them and other parties by Gilmore Finance Pty Ltd (Gilmore Finance), a unitholder of the Trusts. The other defendants in the Gilmore proceedings are Farshad Amirbeaggi, the sole director of the Trustees, and two other unitholders, Vashti Conway and Kate Yates.

3. The specific questions on which judicial advice is sought are:

1. whether the Trustees would each be justified in:

1. defending the claims made against them in the Gilmore proceedings;

2. funding their defences of the Gilmore proceedings out of the assets of the Trusts pursuant to clause 15.1 of the relevant trust deeds;

3. funding the defence of Mr Amirbeaggi by the Trustees’ solicitors out of the assets of the Trusts pursuant to clause 15.1 of the relevant trust deeds; and

2. whether either or both of A1 and A3 require separate legal representation from Mr Amirbeaggi, Ms Conway and Mrs Yates in the Gilmore proceedings.

4. In support of their application, the Trustees relied upon an affidavit of Mr Amirbeaggi affirmed 26 March 2019 and an accompanying exhibit (comprising 12 lever arch folders of documents), a confidential opinion from counsel dated 9 April 2019 (Confidential Opinion), and a confidential affidavit of Joelene Luu affirmed 10 April 2019 and an accompanying confidential exhibit.

5. Gilmore Finance was notified of these proceedings and Mr Marshall SC appeared on its behalf as an objector at the hearing on 10 April 2019. The approach I took was to close the Court and deal with the Trustees’ submissions and evidence, which included the confidential material. After the closed session, Mr Marshall SC made submissions that the Court should not provide judicial advice in this case. At the end of the hearing, I granted leave to the Trustees and Gilmore Finance to provide short supplementary written submissions on issues that arose during oral address, which they did.

6. These reasons deal with the background facts known to the parties, the legal principles, Gilmore Finance’s submissions, and my answers (in summary form) to the questions raised by the application. My consideration of the confidential material relied upon, the matters raised by the Trustees, and the specific terms of my advice, are set out in a separate judgment which will be made available only to the Trustees and their legal advisors, and the Court record copy will be sealed in an envelope marked “Suppressed – not to be opened by anyone other than a Judge of the Court” (confidential judgment).

Background

7. The RMUT was established on 7 May 2008 by way of deed (RMUT Deed). Brenton Yates was the named settlor, and A1 was appointed as the Trustee.

8. Mr Yates was, at that time and until February 2017, a principal with Mr Amirbeaggi in the legal practice known as Yates Beaggi. Mr Amirbeaggi continues to be the principal and director of Yates Beaggi. As noted above, Mr Amirbeaggi is also the sole director and shareholder of the Trustees. He has been in that role since the Trusts were established.

9. At its inception, the unitholders of the RMUT were Ms Conway and Mrs Yates. They remain unitholders in the RMUT. Ms Conway is Mr Amirbeaggi’s wife and holds her units in the RMUT in her capacity as the trustee of the FAV Trust, being the family trust of Ms Conway and Mr Amirbeaggi. Mrs Yates is Mr Yates’ wife and holds her units in her capacity as trustee for the Yates Family Trust.

10. The RMUT was set up for the purpose of purchasing and developing land at 182-190 Great Western Highway, Kingswood (the Kingswood land). In around May 2008, the RMUT obtained an option to purchase the Kingswood land. In April 2010, after obtaining Council consent for a mixed use commercial and residential development, the RMUT exercised the option, paying $2 million to purchase the land.

11. In or around February 2011, Gilmore Finance acquired an indirect 25% interest in the RMUT for $1.75 million, which later became a direct 50% interest.

12. On 12 May 2011, A1, Gilmore Finance, Ms Conway and Mrs Yates (amongst others) executed a unitholders agreement in relation to the RMUT (RMUT Unitholders Agreement), which records the business of the RMUT as being the construction and development of a mixed use residential, commercial and retail building at the Kingswood land: cl 1.1. The RMUT Unitholders Agreement also records that A1 will hold the assets and conduct the business according to the terms of the RMUT Deed and the RMUT Unitholders Agreement: cl 5.1. It further provides that A1 will, through Yates Beaggi, provide certain legal services to the RMUT and A1 in relation to the business of the RMUT: cl 6.1(e).

13. The HPUT was established on 3 August 2009 by way of deed (HPUT Deed). Mr Yates was the named settlor, and A3 was appointed as the Trustee.

14. At the time the HPUT was set up, there were three unitholders: Ms Conway and Mrs Yates (in their capacities as trustees for their respective family trusts), and an unidentified third party. Ms Conway and Mrs Yates continue to hold units in the HPUT.

15. The HPUT was set up for the purpose of entering into options over land abutting the Nepean public and private hospitals (the Nepean land) and to deal with those options or the underlying Nepean land for profit. Prior to 2011, the HPUT was granted options to purchase the Nepean land. In August 2011, it exercised one of those options over part of the land (Hospital land), paying $7.7 million.

16. In March 2011, Gilmore Finance acquired a 5% interest in HPUT for $1.25 million. Gilmore Finance’s interest in the HPUT increased to 33% in June 2012 having paid a further amount of $4.25 million.

17. On 5 June 2012, A3, Gilmore Finance, Ms Conway and Mrs Yates, executed a unitholders agreement in relation to the HPUT (HPUT Unitholders Agreement), which records the business of the HPUT as being the construction and development of the Nepean Land in accordance with a mixed use development application lodged by A3: cl 1.1. It also records that A3 will hold the assets and conduct the business of the HPUT according to the terms of the HPUT Deed and the HPUT Unitholders Agreement: cl 4.1.

18. The RMUT and HPUT Deeds provide that the Trustees are entitled to be paid remuneration and to be indemnified out of the assets comprising the Trust Fund “against liabilities incurred by them in the execution or attempted execution or as a consequence of the failure to exercise any of the trusts, authorities, powers and discretions…by virtue of being the Trustees”: cl 15.1. They also provide that the Trustees will not be liable for “any loss or damage occasioned by the exercise of any discretion or power…or by law conferred on the Trustees or by failure to exercise any such discretion or power” or “any breach of duty or trust whatsoever unless it shall be proved to have been committed made or omitted in personal conscious fraudulent bad faith by the Trustees”: cl 16.1.

19. Gilmore Finance asserts that it has made numerous contributions to the ongoing expenses of the Trusts since July 2011. It also asserts that, on 8 August 2012, it provided a loan to A3 in the amount of $2.25 million which was secured by a mortgage over the Hospital land. That mortgage was discharged on 16 September 2015, after Gilmore Finance had sought to appoint a receiver to the Hospital land.

20. On 15 January 2018, A3 sold the Hospital land for $18 million and Gilmore Finance, Ms Conway and Mrs Yates each received an amount of $4 million by way of distribution.

21. As at March 2018, construction of the proposed development on the Kingswood land had not commenced but the land appears to remain an asset of the RMUT.

The Gilmore proceedings

22. The Gilmore proceedings concern the circumstances in which Gilmore Finance acquired its interests in the Trusts, the manner in which the Trustees have administered the Trusts and how the Trustees treated Gilmore Finance as a unitholder compared to the other unitholders.

23. The Gilmore proceedings were originally commenced in the Queensland Supreme Court. On 13 October 2016, they were transferred to the Commercial List of this Division.

24. On 11 June 2018, Gilmore Finance filed an Amended Commercial List Statement.

25. On 15 June 2018, the Trustees filed their summons seeking judicial advice. The Gilmore proceedings have, in effect, been on hold since that time. The application for judicial advice was first listed for hearing before this Court on 20 July 2018. For various reasons, the hearing of the judicial advice application was adjourned on numerous occasions until it came before me on 12 April 2019.

26. Gilmore Finance makes a number of claims against the Trustees in the Gilmore proceedings. In summary, the claims are that the Trustees:

1. misled Gilmore Finance into investing in the Trusts in contravention of Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, s 18 (ACL) and, as a result, Gilmore Finance has suffered loss and damage (ACL claims). Gilmore Finance claims that various representations were made to it regarding the nature and likely returns of the Trusts’ investments in the Kingswood and Nepean lands, the required contributions of investors to purchase units and fund the projects of the Trusts, and the basis on which unitholder interests would be realised. It asserts those representations were misleading and were relied upon by Gilmore Finance when investing in the Trusts, paying ongoing contributions and lending money to the Trusts;

2. breached the terms of the Unitholders Agreements which required unitholders to pay for ongoing Trust expenses and, in respect of the HPUT, the cost of completing the purchase of the Hospital land, according to the proportion of their unit holdings. The breaches are said to arise from Ms Conway and Mrs Yates having failed to contribute equally, resulting in Gilmore Finance suffering loss and damage (contract claims); and

3. breached their fiduciary and other duties under the Trust Deeds and Unitholders Agreements by keeping inadequate records, failing to provide information to Gilmore Finance, engaging in unauthorised borrowings, making excessive payments to Yates Beaggi, and, in respect of the HPUT, endangering the property of the HPUT, engaging in a unit price discount and failing to enforce the terms of the HPUT Subscription Payment Deed. Gilmore Finance asserts that the Trustees should be removed as a result of their breaches of duties (breach of duty and removal claims).

27. The Gilmore proceedings also include a claim that Mr Amirbeaggi was knowingly involved in the ACL claims. It is alleged that he made many of the misleading representations during discussions with, or in emails sent to, Lyle Gilmore (the sole director of Gilmore Finance), failed to correct misleading representations made in an email received by Mr Gilmore, and was also involved by virtue of his position as sole director and shareholder in, and as the controlling mind of, the Trustees.

28. Ms Conway and Mrs Yates are also defendants to the Gilmore proceedings. It is alleged that they breached the terms of the Unitholders Agreements that give rise to the contract claims.

29. Gilmore Finance seeks damages from the Trustees and Mr Amirbeaggi in respect of the ACL claims, damages from the Trustees, Ms Conway and Mrs Yates in respect of the contract claims, and orders for the removal of A1 and A3 as trustees of the Trusts based on the breach of duty claims.

Legal principles, Gilmore Finance’s submissions and other matters

30. The Trustee Act 1925 (NSW) s 63 relevantly provides:

(1) A trustee may apply to the Court for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument.

(2) If the trustee acts in accordance with the opinion advice or direction, the trustee shall be deemed, so far as regards the trustee's own responsibility, to have discharged the trustee's duty as trustee in the subject matter of the application, provided that the trustee has not been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion advice or direction.

Jurisdiction to give advice

31. Gilmore Finance accepts that a trustee sued for breach of duty can, in appropriate circumstances, properly make an application pursuant to s 63 of the Trustee Act: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42, (Macedonian Church) at [70].

32. It submits that, at least in part, there may be no jurisdiction to give advice as the claims made against the Trustees in the Gilmore proceedings involve allegations of past breaches of trust which concern the personal interests of the Trustees rather than duties owed by them in relation to the Trusts, and do not relate to either the management or administration of trust property or the interpretation of the relevant trust instruments: Re Australian Pipeline Ltd (2006) 60 ACSR 625; [2006] NSWSC 1316 at [25]–[27].

33. A trustee seeking judicial advice must point to the existence of a question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument. That is the only jurisdictional bar to relief under s 63: Macedonian Church at [58].

34. I am satisfied that the Court has jurisdiction to give judicial advice in this case in relation to the breach of duty and removal claims, as well as the other questions raised, and do not accept Gilmore Finance’s submissions on this issue.

35. As Gilmore Finance accepted during oral submissions, the breach of duty and removal claims raise matters regarding the administration of the Trusts and fall within s 63 of the Trustee Act: T57:9-47. In my view, this was an appropriate concession.

36. The breach of duty, removal and contract claims raise questions about the scope and meaning of particular terms of the Trust Deeds and Unitholders Agreements. Those questions include the interpretation of the obligation of unitholders to contribute to the ongoing expenses and funding of the Trusts (cl 8.3 of the RMUT Unitholders Agreement and cl 7.2 of the HPUT Unitholders Agreement); the powers of the Trustees to make payments to Yates Beaggi (cl 6.1(e) and cl 13.1(a) of the RMUT Unitholders Agreement and cl 11.1(a) of the HPUT Unitholders Agreement), and the powers of the Trustees to make certain borrowings (cls 13.1(b) and 13.1(j) of the RMUT Unitholders Agreement and cls 11.1(b) and 11.1(j) of the HPUT Unitholders Agreement).

37. I accept that the breach of duty, removal and contract claims will involve an examination of past acts and courses of conduct on the part of the Trustees, some of which are alleged to amount to a breach of trust. There may also be some doubt about the long term future of the Trusts, given the Hospital land has already been sold and the Kingswood land development seems to be on hold. But the Trusts will still need to be administered going forward as their assets and the entitlements of unitholders have to be dealt with. As the breach of duty, removal and contract claims raise questions regarding the interpretation of trust instruments, their resolution may be expected to have ramifications for and provide guidance to the ongoing trustees (who may not be A1 and A3 if Gilmore Finance succeeds in obtaining relief for their removal) about the future management and administration of trust property: The Application of Eurolinx Pty Limited in its capacity as trustee for the Colbert Security Trust [2017] NSWSC 1306.

38. The plurality of the High Court in the Macedonian Church case also stated that a trustee who is sued for breach of trust is not barred from obtaining judicial advice, nor is such a claim an inappropriate vehicle for judicial advice under s 63. As the plurality in Macedonian Church stated at [70] and [74]:

“In particular, trustees who are sued, particularly for breach of trust, may sometimes experience uncertainly about whether they will be able to obtain indemnity as to the costs of their defence under s 59(4) in any event. Perhaps they will if their breach is excused under s 85(2); but they cannot be sure, in advance, that the court's discretionary power to excuse the breach will be exercised in their favour, and one of the matters to be excused is their failure to obtain the court's direction under s 63 or otherwise. This points strongly to the conclusion that an application under s 63 by a trustee sued for breach of trust (including a breach of trust alleged to arise in the very defence of the proceedings) is not to be seen as one which should rarely if ever succeed. Instead it should be seen as a standard instance to which s 63 can in appropriate circumstances apply…

A necessary consequence of the provisions of s 63 of the Trustee Act is that a trustee who was sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings.”

39. These statements do not mean that a trustee who is sued is obliged by its duties to obtain judicial advice before taking steps to defend itself in proceedings (see for example: Perpetual Investment Management Ltd as Responsible Entity for 10 Schemes listed in the Summons [2014] NSWSC 784, Robb J at [65]-[66]; Henry John Northey v Jennifer Frances Juul & Anor [2014] NSWSC 464, Slattery J at [105]; Bideena Pty Ltd as trustee for the Bideena Pty Ltd Superannuation Fund [2016] NSWSC 735 (Bideena), Sackar J at [33]).

39. However, the statements made by the plurality in Macedonian Church and in other cases confirm that a trustee who is sued, including for breach for trust, is entitled to seek judicial advice under s 63. They also suggest that it is desirable for a trustee to do so if in doubt as to whether to defend proceedings and incur costs rather than rely on s 85 of the Trustee Act to obtain indemnification after the event (Macedonian Church at [36] and Bideena at [33]), and that, ordinarily, the Court should give advice in respect of a trustee’s position in relation to the defence of the proceedings: Jones v Hirst [2013] NSWSC 163 at [22].

40. Gilmore Finance did not submit that the Court did not have jurisdiction to give judicial advice in respect of the ACL claims or the other questions on which advice was sought.

41. While the ACL claims involve allegations of past statutory wrongs, they are made in respect of dealings with potential investors and unitholders of the Trusts. Their outcome may also have a future impact on the management of the Trusts’ assets having regard to the scope of the Trustees’ indemnities in cl 15.1 of the Trust Deeds. This Court has, on other occasions, accepted that there is a jurisdictional basis to provide judicial advice where a trustee is alleged to have engaged in misleading and deceptive conduct: Perpetual Investment Management Ltd as Responsible Entity for 10 Schemes listed in the Summons [2014] NSWSC 784; Jax Quickfit Franchising Systems Pty Ltd as Trustee for the Jax Quickfit Franchising Systems Unit Trust [2012] NSWSC 1114.

Discretionary matters

43. Once the jurisdictional hurdle under s 63 of the Trustee Act has been surmounted, the Court has a discretion to provide the advice sought, which is confined only by the subject matter, scope and purpose of the legislation: Macedonian Church at [59] and [196]. In exercising its discretion, the Court should proceed on the basis that the interests of the trust estate are paramount: Macedonian Church at [104]-[105], [107], [125], [196]-[197].

44. Gilmore Finance submits that the Court should exercise its discretion and decline to give the advice sought for two reasons.

45. First, it would be inappropriate to give judicial advice where the allegations of past breaches of trust cannot be disentangled from the other allegations made, including the ACL claims. Second, if Gilmore Finance succeeds, the Trustees and Mr Amirbeaggi will be found not to have acted in good faith and will not be entitled to any indemnity for their costs either under general law or contract. To provide advice that justifies the assets of the Trusts being used to fund the defences of the Trustees would, in those circumstances, be inappropriate.

46. From those and oral submissions made at the hearing, it is apparent that Gilmore Finance’s key concern relates to the funding of the Trustees’ defences. As Senior Counsel for Gilmore Finance put it, “the substantial point is – how does the Court deal with the costs?”: T57:45. This is in a context where, it was said, the claims made in the Gilmore Finance proceedings arise from Mr Amirbeaggi’s actions and the case “is really about the director’s conduct” (T56:39-40, T57:17-20), and because of the submission that the Trustees will not have the benefit of any indemnity if Gilmore Finance succeeds in the proceedings.

47. I do not accept Gilmore Finance’s submission that the Court should decline to provide judicial advice regarding whether the Trustees are justified in defending the claims made against them (and funding their defences of those claims out of the trust assets) because the past breaches of trust cannot be disentangled from the other allegations.

48. Where necessary, the Court may give judicial advice on particular issues raised in proceedings (see for example, Application of Gnitekram Marketing Pty Limited [2010] NSWSC 1328; Re Rosewood Research Pty Limited [2014] NSWSC 449), rather than on all claims made. Further, in this case, the breach of duty, removal, contract and ACL claims raise, for the most part, discrete factual allegations and issues.

49. In any event, I have ultimately concluded (for reasons and on the terms set out in the confidential judgment) that judicial advice should be given to the Trustees that they are justified in defending all the claims in the Gilmore proceedings. Gilmore Finance’s submission about the difficulty in disentangling certain aspects of the proceedings is, therefore, not dispositive.

50. Gilmore Finance’s submission that the Trustees and Mr Amirbeaggi will be found not to have acted in good faith does not provide a sufficient basis on which to decline to advise the Trustees that they are justified in having recourse to Trusts’ assets to fund any part of their defences. The only pleading to that effect relates to the breach of duty and removal claims: [116] and [138] ACLS. The ACL and contract claims, as currently pleaded, do not allege that the Trustees conducted themselves in bad faith.

51. The indemnities under cl 15.1 of both Trust Deeds are broadly drafted. In the absence of any finding that the Trustees have not conducted themselves in good faith in the manner pleaded in support of the breach of duty and removal claims, it is to be expected that the Trustees would be able to rely on the indemnities to pay the costs incurred in defending the claims made against them in the Gilmore proceedings.

52. Further, I am not at this stage required to determine whether the Trustees acted in bad faith. As noted by the plurality in Macedonian Church at [74], in deciding whether to provide advice:

“A judge must determine whether, on the material then available, it would be proper for the trustee to defend the proceedings. But deciding whether it would be proper for a trustee to defend proceedings instituted about the trust is radically different from deciding the issues that are to be agitated in the principal proceeding. The two steps are not to be elided. In particular, the judicial advice proceedings are not to be treated as a trial of the issues that are to be agitated in the principal proceedings.”

53. As to the suggestion that the Trustees’ defences should not be funded because the claims are about Mr Amirbeaggi’s conduct, Gilmore Finance’s senior counsel accepted that the HPUT contract claims, as pleaded, do not impugn Mr Amirbeaggi’s conduct: T57:27. On the current pleading, Mr Amirbeaggi is only a party to the ACL claims - he is not a party to the contract or breach of duty and removal claims.

54. The plurality in Macedonian Church recognised that the nature of the trust in question is a relevant factor when considering whether to grant judicial advice in a particular case. Where litigation involves a breach of trust allegation by a beneficiary against a trustee of a non-charitable trust who has profited and the defendants have a personal capacity to fund the defence, or the only real issues are the liability of that trustee personally to make good breaches of trust, the Court may decline to give judicial advice at all or decline to allow the trustee access to the trust property to fund the defence. This is particularly as an order justifying a trustee’s funding of a defence from trust property has the consequence that the trustee could not later be ordered to restore that property absent some finding of fraud, wilful concealment or misrepresentation: Macedonian Church at [67]–[68] and [166], s 63(2) Trustee Act.

55. The financial capacity of parties to trust litigation and whether it is fairer and more practical to allow competing claimants to contest litigation at their own risk of costs are also relevant factors in considering whether judicial advice should be given to the Trustees to have recourse to the assets of the Trusts to fund their defences. So too is the extent to which recourse to the assets of the Trusts for their defence costs would deprive Gilmore Finance of any success in the proceedings: Macedonian Church at [83]-[84]; Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [62].

56. Gilmore Finance did not make any submissions on those discretionary factors but there is no dispute that the Trusts are non-charitable, private, commercially focused trusts, the objects of which are to create wealth for the financial advantage of unitholders, and all of the claims in the Gilmore proceedings involve a dispute between the Trustees and a beneficiary unitholder, Gilmore Finance.

57. In accordance with the usual practice of the Court, and as noted earlier, I have received and considered the Confidential Opinion.

58. When provided with an opinion from counsel in support of an application for judicial advice, the Court is not to determine the substantive issues in dispute about which the opinion is provided. Rather, the Court must be satisfied that the opinion addresses the facts necessary to support the legal conclusions reached and demonstrates that the propositions of law relied upon for those conclusions are properly arguable: Macedonian Church at [162]. I am satisfied that the Confidential Opinion deals with those matters and supports the conclusion that there are reasonable prospects and that it would be proper for the Trustees to defend the claims made against them in the Gilmore proceedings.

59. I have concluded that the Trustees would be justified in defending the claims made against them in the Gilmore proceedings, and having recourse to the assets of the Trusts in relation to their funding, but on the terms and for the further reasons set out in my confidential judgment.

Other questions raised by the summons

60. Gilmore Finance’s supplementary written submissions indicate that it did not understand judicial advice was sought on the question of whether the Trustees would be justified in funding Mr Amirbeaggi’s defence of the ACL claims: at [9].

61. I have proceeded to consider that question on the expectation that Gilmore Finance would have objected to the granting of such advice on similar grounds to those they advanced on the other questions.

62. I have declined to provide advice that the Trustees are justified in funding Mr Amirbeaggi’s defence from the assets of the Trusts pursuant to cl 15.1 of the Trust Deeds, as sought in the summons. My reasons for doing so are set out in the confidential judgment and I simply note that, in declining to provide that advice, I have not made any determination as to whether Mr Amirbeaggi would be entitled to indemnification from the Trusts’ assets in respect of his defence costs.

63. Gilmore Finance did not make any submissions on the question of whether the Trustees require separate representation from Mr Amirbeaggi, Ms Conway and Mrs Yates. At this stage of the proceedings, I have advised the Trustees that they do not require separate representation to Mr Amirbeaggi, Ms Conway and Mrs Yates for the reasons and subject to the matters set out in the confidential judgment.

Conclusion

64. In summary, the advice I give pursuant to s 63 Trustee Act 1925 (NSW) and the orders I make are as follows:

1. Advise that Aesthete Pty Ltd and Aesthete No. 3 Pty Ltd (the Trustees) would be justified in defending the claims made against them by Gilmore Finance Pty Ltd in proceedings 2016/257478 (Gilmore proceedings), in accordance with terms of the advice given in the confidential judgment of the Court dated 31 July 2019.

2. Advise the Trustees that they would be justified in funding their defences to the Gilmore proceedings out of the assets of the Real Money Unit Trust and the Hospital Precinct Unit Trust pursuant to cl 15.1 of the Real Money Unit Trust and Hospital Precinct Unit Trust Deeds, in accordance with the terms of the advice given in the confidential judgment of the Court dated 31 July 2019.

3. Decline to provide the advice sought that the Trustees would be justified in funding the defence of Mr Amirbeaggi to the claims made against him in the Gilmore proceedings by the Trustees’ solicitors out of the assets of the Real Money Unit Trust and the Hospital Precinct Unit Trust pursuant to cl 15.1 of the Real Money Unit Trust and Hospital Precinct Unit Trust Deeds, for the reasons set out in the confidential judgment of the Court dated 31 July 2019.

4. Advise the Trustees that, subject to the matters referred to in the confidential judgment of the Court, at this stage of the Gilmore proceedings they do not require separate representation to Mr Amirbeaggi, Ms Conway and Mrs Yates in the Gilmore proceedings.

5. Order that publication or other disclosure of the confidential judgment of the Court dated 31 July 2019, to other than to the Trustees and their legal representatives, be prohibited until further order and the reasons and conclusions be placed in a sealed envelope marked “Suppressed – Not to be opened by anyone other than by a Judge of the Court”.

65. Given the reasons and terms of my advice as set out in the confidential judgment, the Trustees may seek to make a further application for judicial advice at a later stage of the Gilmore proceedings. In that event, I consider it would be appropriate for the Trustees to give notice to Gilmore Finance of that application and serve it with the non-confidential material on which they intend to rely to enable Gilmore Finance to make submissions at any further hearing.

**********

Decision last updated: 31 July 2019